Constellation Brands Inc (NYSE:STZ) shares plummeted 13% on Friday morning after the US drinks maker cut its growth outlook for the second time this fiscal year.
The company reported weaker-than-expected Q3 earnings, citing sluggish consumer demand for its beer and wine products.
For Q3 FY2025, Constellation posted adjusted earnings per share (EPS) of $3.25, missing the $3.31 estimate.
Sales totaled $2.46 billion, falling short of the $2.53 billion forecast.
The company also lowered its full-year guidance, projecting adjusted EPS in the range of $13.40 to $13.80, slightly below the analyst estimate of $13.71. However, it raised its operating cash flow guidance to $2.9 billion to $3.1 billion, up from a prior range of $2.8 billion to $3 billion.
CEO Bill Newlands pointed to ongoing "uncertainty" around consumer spending as a key factor impacting sales, particularly in its beer and wine segments. Beer depletions grew 3.2%, missing expectations of 4.2%, and beer margins worsened, dropping 59 basis points.
Jefferies analysts described the quarter as "weak," with worsening trends in both beer and wine & spirits categories.
“Buybacks were better and will likely stay elevated,” Jefferies analysts wrote. “Expect weakness.”